Seqi Olivine fee – western Greenland

The Seqi deposit in western Greenland, a significant resource of the industrial mineral olivine, was acquired by the Corporation in 2002 and held under an exploration license until June 30, 2005.

The Seqi deposit in western Greenland, a significant resource of the industrial mineral olivine, was acquired by the Corporation in 2002 and held under an exploration license until June 30, 2005.

In 2003-04, the Corporation undertook a study to address the feasibility and viability of developing a quarry on the deposit, crushing the olivine into specified products, and shipping these to operations in Europe, under an agreement with Minelco AB, a subsidiary of LKAB of Sweden.

Sale of Seqi concluded
The Corporation accepted an offer from Minelco AB to dispose of its interest in the Seqi project. The Corporation concluded this transaction on June 30, 2005 when the sale proceeds of $10 million were received.

In addition to the purchase price there is an annual fee to be paid by Minelco AB over 17 years on the basis of produced tonnage. A guaranteed minimum annual fee of $1 million applies to years 3 through to 14 of production, subject to certain conditions. This fee income will be recognized in the financial statements as it is earned.